Rightways - Sowing the seeds of Succes

Friday, 30 April 2010

It seemed to me Goldman Sachs had forgotten the first rule of business stated by the late management guru, Peter Drucker

The Goldman Sachs fiasco should remind businesses the purpose of their existence

Whose business is it anyway - by John Zenkin

I WAS going to write about the rather dry subject of risk assessment this week until I watched the Goldman Sachs congressional testimony on Tuesday night and linked it in my mind with an article in The Economist of April 24 entitled “Shareholders vs Stakehol-ders: A New Idolatry” which deals with the old conundrum of where to focus in good governance: on shareholders, customers or employees.

The reason I changed my mind was that I was shocked to listen to three Goldman Sachs traders being unable or unwilling to answer a simple “Yes” or “No” question from Senator McCaskill of Missouri.Her question was simple and to the point: did they have a fiduciary duty to their clients, which means looking after their clients’ interest first?

Only one of the panel of four said “Yes”.

The other three hedged their answers to the increasing anger of the senator as she repeated her question.

From the testimony it appeared that all that mattered was that Goldman Sachs made money at the expense of the clients it was supposed to serve, even going to the extent of shorting trades that they had sold to their clients as being good investments, even though internal memos described the assets involved as “shi**y”.

Whether their behaviour was illegal is the subject for the courts, though it certainly appeared that the senators believed strongly that what the traders had been doing was unethical.

As I watched, fascinated by the drama, it seemed to me Goldman Sachs had forgotten the first rule of business stated by the late Peter Drucker in 1946 in his book The Concept of the Corporation that “the purpose of business is to create and maintain satisfied customers”.

What is more, this rule of business was Goldman’s own rule as long as they were a partnership because they recognised that the long-term interests of the partners were to avoid alienating their customers in return for a short-term profit.

What seems to have happened since Goldman Sachs went public is that its employees have been able to look after their own interests at the expense of both customers and shareholders.

This is because the money they were playing with was no longer theirs, but that of other people – their investors and their shareholders.

This suggests that there are limits to how much a company can look after the interests of its employees, especially when they are paid enormous bonuses, apparently regardless of how much pain the shareholders are experiencing (as we have seen in the case of AIG or Merrill Lynch).

It is even more the case when the payout comes from the taxpayer in the form of bailouts.

It seems to me therefore that if there is an excessive focus on protecting shareholder or employee interests at the expense of the client or the customer, the company could put itself at unnecessary risk as far as its reputation and license to operate are concerned.

How soon Goldman Sachs will recover from the damage to its brand shown in the following quote from April 28’s Washington Post is anybody’s guess:

“There was a time when issuers would pay a premium to have Goldman Sachs underwrite their securities, just as there was a time when investors would pay a premium to buy into a Goldman-sponsored offering. Today, Goldman has fully monetised the value of its reputation, and anyone who pays such a premium is a fool.”

I was also struck by the fact that their style of defence bore similarities to those of Exxon in the Valdez case, Shell in the Brent Spar case and recently Toyota when it was found wanting on quality. When customers get upset or when NGOs go after companies, their argument is emotional – designed to be fought in the court of public opinion rather than in a court of law. Legal niceties, technical subtleties do not go down well with people who are looking for memorable soundbites.

What ordinary people want to see is someone who shows emotion and empathy, says he/she is sorry and that he/she will try to do better next time and then there can be closure. Lawyers, with their eye on court cases and damages, advise clients to never say sorry and to prevaricate and obfuscate. This merely increases the anger and frustration of the offended parties.

I have, however, yet to see a company suffer because it has focused too much on serving its clients or delighting its customers.

Perhaps a more correct approach in today’s world is that of the new boss of Unilever, quoted in The Economist article referred to earlier, where he says:

“I do not work for the shareholder, to be honest; I work for the consumer, the customer … I’m not driven and I don’t drive this business model by driving shareholder value.”

·The writer is CEO of Securities Industry Development Corp, the training and development arm of the Securities Commission.

A range of issues keeps China in its coveted position as the most watchable country.

CHINA’S global profile remains undiminished this week, despite many other issues competing for international headline space.

The buzz among foreign investors is whether it is too late to “enter the Chinese market.” There is a strong implicit element of time for what will soon be, if not already, the world’s biggest market.

China Daily on Monday ran a piece on how opportunities still exist, particularly for SMEs. A consensus seems to be that while doing business in nominally communist China is better than ever because of improvements in institutional frameworks and the regulatory environment, competition from Chinese rivals particularly “tech companies” is getting tough.

The Google-Baidu competition could be an object lesson here. With incentives like the recent 4 trillion yuan (RM1.88 trillion) stimulus package for state-owned enterprises, China’s capitalist ethic is doing well.The number of private companies grew more than 4,600% to 6.6 million over the past 18 years. Among foreign corporations, 96% of Fortune 500 companies are already operating in China.

Then there is the negative side as well, including that which reinforces negative stereotypes. This often involves Beijing’s attempts to control cyberspace, and what China’s 384 million Netizens may or may not do.

A Bill of amendments requiring Internet companies and telcos to report on users passing state secrets is up this week for its final reading in the National People’s Congress Standing Committee before becoming law. Associated Press reports that the move has already attracted criticism at home and abroad.

Officially, tightening the law on communications use is to ensure greater national security. Among the problems is that interpretation of what is a “state secret” is open to interpretation and abuse, so the law would be arbitrary and draconian.

More legislation attracting controversy this week concerns modifications to the law on the detention of suspects. When police have been required to pay compensation to persons wrongly detained, now compensation applies only to wrongful and prolonged detention beyond 37 days (one week and one month).

There would be no huge claims; sums derive from the average daily wage of a state employee in the preceding year. However, there are provisions for further compensation in cases of police brutality. Such laws may not be the best indicators of social change. A better measure would be the impact of public debate and argument on the policymaking process.

China’s next international extravaganza, following on the 2008 Olympics, is Shanghai’s World Expo that opens tomorrow. Singapore’s Straits Times bills it as the “glitziest and greenest” Expo of them all.

The organisers would make it the most glamorous World Expo yet. But, mindful of critics who would condemn a commercial showcase with doubtful environmental value, Shanghai’s show would also be the most environment-conscious.

For symbolism, there would be the world’s largest solar panel; for novelty, a restaurant would recycle excess food to produce electricity; and for visitors’ convenience, 1,000 vehicles powered by renewable energy would ferry people around the site.

Four large parks would act as “green lungs” while 3,000 inefficient factories have been closed. The Expo, due to run for six months, took nine years to prepare. The environmental aspects alone cost US$33bil (RM106bil), which is twice that of the Beijing Olympics. This indicates something of the scale with which China operates, ever since the Great Wall. Inevitably, the growing clout of a rising superpower would be reflected in its role in major multilateral institutions. Perhaps the most appropriate here is the World Bank, where this week China nearly doubled its voting power to 4.42%.

This places China as third-powerful in the bank after the US and Japan, reflecting its number three position in world GDP terms. That could soon change again: China’s economy is already bigger than Japan’s in PPP (purchasing power parity) terms, and is set to be number two even in GDP terms this year.

Every other country in the 186-member institution had its share reduced to make way for China’s increased strength except the US, which retained its share at 15.85%. But since the world’s largest debtor nation owes so much of its wherewithal to China’s economy, relations among Bank members may have to change further to remain relevant.

MIDWEEK By BUNN NAGARA

Thursday, 29 April 2010

Will China crash economically?

Capital Talk

CHINA bashing by now must surely be the most popular sport among Western investors, mass media and institutions. China crashing now, China crashing a few years later, China crashing anytime and crashing forever is the mantra.

A mantra is like a hymn. If you chant it endlessly and repeatedly, it gets stuck in one’s head. However, the fact that it may get stuck in one’s head does not mean that it will happen or that it represents the reality.In fact, a mantra based on superfluous analysis or worse, an inherent bias, would block the real realities from surfacing. An objective analysis of the global economic conditions would show that this is what is actually happening.

With all the high profile, high publicity given to China bashing, all eyes are centred on China in general and its property sector in particular. Will China crash? When will China crash? i Capital’s managing director gets these questions all the time.

In contrast to all the dire predictions about China, i Capital expects China’s economy to nicely soft land this year. When the Lehman Panic broke out in September 2008, and almost collapsed the world economy, China was ahead of every other economy in implementing economic expansion measures.

China very quickly bottomed out and pulled the global economy out of its worst conditions (which, of course, no Western country has given China any credit). While the US led the world economy into possibly the worst recession in a long time, China and the rest of Asia quickly pulled the world economy out of a US-created catastrophe (seecharts).

As China’s economy recovered quickly and strongly, the Chinese government has subsequently acted very quickly and effectively again. Measures to cool the hot property sector down have already been announced months ago.

China’s government is ahead of the property “bubblet” curve. However, it takes time for the impact to be felt, which is expected to take place in the coming months.

Selected segments of the property sector will cool down but the rest of the economy will still be performing well. China’s economy is huge and a cooling of the property sector will not crash the continental economy.The decision by The People’s Bank of China not to raise interest rates so far is correct. Why kill the rest of the economy when there is no need to? There are many other effective ways to tackle the property “bubblet”, especially when the cause of the rise in property prices is not low interest rates.

Another unnoticed development that favours China soft-landing this year is that the current global economic recovery is not synchronised. The recovery in the United States is behind that of China and the rest of Asia but it is gathering momentum.

The growth in US exports and the recovery in the industrial sector have led the US recovery. Consumer spending is also recovering and will gather momentum as the US job market improves further. The US housing sector is also expected to contribute positively this year.

As 2010 progresses, the US economic recovery will play a greater role in global economic growth. This is ideal, as it will allow China to turn to other economic sectors for growth while it tackles its property bubblet.In short, as the US economic recovery gathers momentum in 2010, China’s GDP growth would slow to a healthy, high single-digit rate.

Based on the economic outlook of the United States and China, i Capital sees a benign global economy. Unlike 2006 or 2007, 2010 will see a healthy unsynchronised global recovery. This upbeat view can, of course, be turned topsy-turvy by unexpected events. There seems to be plenty nowadays.

One, while the currency pressure on China seems to have reduced somewhat, the United States is now cleverly turning to other countries and US-dominated global institutions to crack China’s position. Apparently, even India and Brazil are now joining in the bandwagon as prominently headlined on the front page of the Financial Times.

So, although the currency pressure cooker is not boiling over for now, the threat of a trade war needs close watching.

Is China crashing the real worry? Or is the eurozone breaking up the real worry? Actually, an economy that has crashed but that has not been described in this way is the eurozone a.k.a a continent of discontent.

First, it was the PIGS (Portugal, Ireland, Greece and Spain). The budget deficit for Iceland is 14.3%, Greece 13.6%, Spain 11.2%, Portugal 9.4% and China 2.2%. The China bashers say that China’s budget deficit is actually higher because it does not include the local governments. We wonder why the clever Greeks did not think of this simple trickery.

Anyway, the Greek civil servants are on strikes and the budget deficit is running at unsustainable levels. No wonder the Greek economy is not in a sustainable mode. This continent of 35-hour working week but with wages paid equivalent to 350-400 hours of work in China or India is declining fast, faster than what is generally realised or acknowledged.

Greece, supposedly the birthplace of democracy, has transformed itself into a “debtmocracy”. Will China crash, as we all are led to believe, or will Greece be the Sword of Damocles for the eurozone and thus the global economy?

Then, as if Greece et al is not enough, as if an evil spell has been cast on Europe, we all discovered that cash-starved Iceland is actually rich with ashes. Imagine Iceland, more than 1,800km away from London and more than 2,100km away from Germany, taking revenge on the eurozone. Who would imagine that?

The hiatus caused by the volcanic eruption is not small. That a volcano from Iceland is causing so much havoc in the eurozone is symbolic of the very difficult period that this fledgling economic bloc is undergoing.

Almost every economy in the eurozone, including that of the United Kingdom, is in trouble. As i Capital wrote above, this is the reality, this is what is actually happening.

China and the rest of Asia are not crashing. The United States crashed and the eurozone has crashed. Should the East follow the West?

i Capital does not think so although there are many out there who would want to see this happening.Once again, we have to say, In China We Trust. As i Capital advised previously, “This decoupling is here to stay”.

A US judge has crushed former Australian internet high-flyer Daniel Tzvetkoff's hopes of winning release from prison ahead of his trial.Just a week ago Tzvetkoff, 28, accused of being the mastermind of a $US540 million ($590 million) internet gambling money laundering and bank fraud scheme, was granted bail by District Court Judge Peggy A. Leen in Las Vegas.

The decision infuriated US government prosecutors who believe Tzvetkoff may have a secret stash of $US100 million and would flee if released from prison.

At a fresh hearing on Wednesday in the New York District Court, where the trial will be held, Judge Lewis A. Kaplan sided with prosecutors and reversed the decision.

He declared Tzvetkoff "a serious risk" of fleeing if granted bail.

"No condition or combination of conditions will reasonably assure the presence of the defendant as required," Judge Kaplan noted.

Tzvetkoff has been locked up in the North Las Vegas Detention Center since his arrest at a casino in the city on April 16 despite Judge Leen's bail decision last week.

With Judge Kaplan's ruling, Tzvetkoff faces a tough road.

The complicated money laundering and bank fraud charges he faces could take two years to be finalised in court, resulting in Tzvetkoff spending that time in jail even if he is ultimately found not guilty.

If convicted of the charges Tzvetkoff faces up to 75 years in jail.

US Marshalls will transport Tzvetkoff from the jail in Las Vegas to a prison in New York.

The decision is a major blow to Tzvetkoff and his family, including fiancee Nicole Crisp who is eight months pregnant and hoped to live with Tzvetkoff in New York until the trial was completed.

Tzvetkoff's father, Kim, flew to Las Vegas last week to support his son in court and agreed to put up his $US1.17 million Brisbane home as bond and also drive his son from Las Vegas to New York for the proceedings.

If Judge Leen's bail decision had not been overruled, Tzvetkoff would have lived in New York and submitted to electronic monitoring, maintained a verified residence in New York and abide by a curfew.

Wednesday's court decision is the latest fall from grace for Tzvetkoff, who created highly-profitable Brisbane-based internet payment processing company Intabill, bought a $27 million home on the Gold Coast, drove Lamborghinis and Ferraris, sponsored a professional motor racing team and had was once estimated to be worth of $82 million.

Shares in UK lenders slide amid fears of renewed credit crunch but French, German and Swiss most at risk from Greek default

Barclays is estimated to have £40bn exposure to Greece, Portugal and Spain, while RBS may have £35bn in loans. Photograph: Kevin Coombs/Reuters

Fears of a fresh banking crisis stalked the markets today as the risk of Greece defaulting on its debt repayments raised concerns about the exposure of major banks to indebted countries in Europe.

As analysts estimated that Britain's banks have a combined exposure of £100bn to Greece, Portugal and Spain – the three countries causing most concern on the financial markets – the Financial Services Authority was closely watching the markets and assessing exposures to the vulnerable countries.

After the ratings agency Standard & Poor's had downgraded Greek debt to "junk" yesterday, bank shares were knocked today but spared further falls as the downgrade of Spain's crucial credit rating came just as the stock market was closing. With UK banks standing to lose more in Spain than in Greece and Portugal, analysts said there might have been a more severe reaction if London had remained open longer today.

Analysts at Credit Suisse calculated that UK banks had £25bn of exposure to Greece and Portugal but £75bn to Spain, where the collapse in the property market has already forced banks such as Barclays to admit to bad debt problems and left Royal Bank of Scotland facing questions about its exposure.

"Lloyds' exposure to the three regions is likely to be negligible, we estimate that Barclays has £40bn exposure (predominantly loans in Spain and Portugal, excluding daily positions in Barclays Capital), and RBS has around £30bn–£35bn (again predominantly Spain, although we estimate £3bn to £4bn in Portugal and Greece as well)," the Credit Suisse analysts said.

Money markets, in which major banks lend to each other, also reflected the tension caused by the Greek downgrade with eurozone interbank lending rates enduring their biggest rise in nearly a year.

Much of the anxiety was targeted at French, German and Swiss banks. Howard Wheeldon, of BGC Partners, said: "If Greece defaults that means the pressure will then be felt and exerted on national banks that hold the Greek debt. That includes very many German, French and Swiss banks and it just may be that with so many banks involved one of these might just go down."

At today's annual meeting, RBS's chairman, Sir Philip Hampton, played down any exposure to Greece, while Lloyds' finance director, Tim Tookey, said on Tuesday that the bank had no "material [significant] exposure". Barclays publishes a trading update on Friday and will face questions about its exposure to the countries being downgraded.

In early trading today banks were the biggest fallers, with RBS tumbling 7%, Lloyds down by 6.5% and Barclays off 4%, though they recovered much of their losses by the time market closed.

Among continental European banks, analysts at Evolution calculated that Fortis, Dexia, CASA and Société Générale were most affected because of the value of their Greek debt holdings relative to their size.

According to Barclays Capital, UK banks account for only 3% of the exposure to Greek bonds, while data from the Bank for International Settlements shows that, at the end of 2009, Greece owed about $240bn (£160bn) overseas. Of this, France and Germany have the biggest exposures of $75bn and $45bn respectively.

Analysts expressed concern about the problems spreading. Daragh Quinn, banks analyst at Nomura, said: "Given the scale of the debt problem facing Greece, the prospect of some kind of debt rescheduling or even default are being considered as possibilities by the market. Sovereign risk concerns are also spreading to Portugal and Spain."

Only last week the International Monetary Fund, which has been called in to help fund the Greece deficit, warned about the impact of a sovereign risk crisis. "Concerns about sovereign risks could undermine stability gains and take the credit crisis into a new phase, as nations begin to reach the limits of public-sector support for the financial system and the real economy," the IMF said.

Credit Suisse analysts pointed out that not all the problems facing the markets were negative for the banking sector. "The increase in volatility should assist revenues at the investment banks, particularly for primary dealers like Barclays," the Credit Suisse analysts said.

"But there are clearly a number of important potential negatives. These include the potential for increased capital and liquidity trapping in affected sovereigns, or increased micro prudential requirements for local subsidiaries. Our bigger concern, however, is increased nervousness towards the UK," they added.

But while the timing of the downgrade of the Greek sovereign rate surprised the markets, there had been expectations for some time that the ratings agencies would eventually lose patience with the situation and take the decision to downgrade. This might have helped to cushion the markets' reaction to the situation, analysts said, and was likely to ensure that the major banks and other investors had already assessed their exposure to the Greece market before the downgrade took place.

The impact of a downgrade

The cost of borrowing for the Greek government briefly hit 38% in a stark illustration of the impact that a downgrade can have on the health of a nation's finances. Greece has been graded BB+ by the credit rating agency Standard & Poor's, official "junk" territory. It is now on a par with Azerbaijan, Colombia, Panama and Romania.

Britain is one of 11 countries with a prized 'triple A' rating, along with Australia, Denmark, Germany, France, the United States and Luxembourg. But it is the only one of the elite to have been put on "negative watch", a warning that it might face a future downgrade.

The cost of Greece borrowing on a two-year bond was as little as 1.3% in November, but has risen sharply amid fears of bankruptcy. By the end of tradingtoday, the cost had fallen back to 19%. In contrast, Britain is able to borrow on two-year bonds at a rate of 1.2%. S&P's lowest rating, CCC+, is assigned to Ecuador, which defaulted on $3.2bn of bonds last year.

Wednesday, 28 April 2010

(Reuters) - Shanghai unveils to the world on Friday its multi-billion dollar World Expo, which China hopes will be an opportunity to assert its growing global clout and show off the fruits of its economic transformation.

Shanghai, already China's richest and most glamorous city, has made an unprecedented effort to impress with its Expo, a world fair which has in recent years largely dropped off the world's radar, and to grab some glory from Beijing's Olympics.

The new roads and subway lines which criss-cross the city have been purposely built not only for Shanghai's future growth, but also to transport the 70 million mainly Chinese who will visit during the six-month extravaganza.

China says it has spent $4.2 billion on the Expo -- double what it spent at the 2008 Beijing Olympics. It is the most expensive and largest Expo to date, and local media have reported the true cost is closer to $58 billion, including infrastructure.

"This is a very important moment. We have made preparations for years," Hong Hao, Deputy General for the Expo, told Reuters.

Shanghai wants to put the World Expo back on the world stage as the first developing country to host one, encouraging countries large and small to take the Expo seriously and use it as a means to improve fractured foreign ties and increase trade.

China's relations with the outside world have been strained of late, with issues like the value of the yuan currency, a fight over censorship with Google and the trial of four Rio Tinto executives casting a pall over the country's efforts to present itself as a respected international player.

Leaders including French President Nicolas Sarkozy, Russian President Dmitry Medvedev, South Korean President Lee Myung-bak and EU Commission President Jose Manuel Barroso will be at Friday's opening ceremony.

Smaller countries, such as Israel, are also making efforts to engage China through the Expo, despite the shadow cast by the financial crisis.

Yaffa Ben-Ari, deputy commissioner general of Israel for the Shanghai World Expo, said the Jewish state aimed to boost cooperation through the event. It was the first time, he said, that Israel had built its own pavilion, with the government allocating a budget of $12 million for the project.

TEETHING PROBLEMS

The project has not been without its detractors. Rights groups have complained about evictions of residents to make way for the two spectacular main Expo sites on either side of the murky Huangpu River.

Some Chinese have also wondered why the country, with its growing rich-poor gap, severe environmental and other problems is spending so much on an event which lacks an Olympics' cachet.

"Our living costs are five times yours but our salaries are one fifth of yours. Yet we survived and we are still joyfully and happily welcoming friends from all around the world," wrote popular Shanghai blogger Han Han, with a strong sense of irony.

Despite unremitting propaganda in state media about how great the Expo will be, not all the country pavilions will be finished in time for Friday's opening.

Organizers are also trying to iron out teething problems for handling large crowds after initial trial days received widespread complaints from tired, hungry visitors.

"Most people are very excited," said Shanghai resident Si Yudan, 30, brushing off all the inconveniences of seemingly endless renovations and building projects to spruce up the city.

Security has been stepped up, with subway passengers forced to go through airport-style bag checks.

Analysts, however, say a terror attack is unlikely due to the relatively low global profile of the Expo.

"Of more concern would be bird flu or H1N1. If that breaks out on site, how will they manage to prevent it spreading and how will they attempt to quarantine such a large number of people?" said Greg Hallahan, regional director at business risk consultancy PSA Group in Shanghai.

The Joos Orange solar charger is the physical manifestation of simplicity. It's rugged, easy to store and carry, and (most importantly) quick to bestow a watt or two whenever you need it. Simply choose the correct adapter (the Orange comes with seven of the most popular ones), plug in your depleted phone or DS into the charger and let the life-giving juice flow. Yep, that's it.

Weighing in at a pound-and-a-half, the Orange is roughly the same size and weight as an iPad —and arguably a lot more useful. It can be completely submersed in water, dropped, kicked, and, in general, take the worst abuse man or nature can dish out.

Nestled inside its durable polycarbonate shell is a super-efficient 5,400-milliamp-hour replaceable lithium-ion battery capable of holding its charge for years. In our tests, we managed to dole out four full charges to a completely depleted iPhone before the Orange needed a solar recharge. It even fully charged the notoriously fickle iPad.

While PC owners will be able to download a standalone GUI for precise power metrics, the unit also has two LED status lights on the sides: one solar light (red) and other for the battery (green). When the Orange is running, the red light will blink rapidly to let you know you're getting juiced. Similarly, the green light spits out one blink for every 20 percent of the battery that's full. Four blinks and you know you have a battery that's between 60 and 80 percent full. Even better: the Orange comes with a pair of attachable reflectors that help collect somewhere between 20-30 percent more power when affixed to both ends.

No sun? No problem. While our test model wasn't equipped to charge efficiently by USB, the folks at Solar Components assured us that production models can be refilled at the standard USB charging rate (500 milliamps at 5 volts or 2.5 watts).

So go ahead and leave those outlets. Sucking down solar power has never been easier.

WIRED Cheap. Crazy-durable. Comes with nearly all connector tips you'll need for your mobile gear (you can order specific ones from Solar Components if not). Two screw-in mirror panels beef up charging efficiency by 30 percent. Nuclear fallout blot out the sun? Charge up by USB.TIRED No Mac compatibility for GUI software. Deciphering the LED takes some getting used to. Screws for attachable mirrors are not ideal and are easily lost.

Tuesday, 27 April 2010

Brain training games do not make you smarter - FACT

"Brain games" are certainly fun, but contrary to what many players hope, they're not likely to make you any smarter. From a six-week study paid for by the BBC and reported by Discovery News:Photo by wetwebwork.

More than 8,600 people aged 18 to 60 were asked to play online brain games designed by the researchers to improve their memory, reasoning and other skills for at least 10 minutes a day, three times a week.They were compared to more than 2,700 people who didn't play any brain games, but spent a similar amount of time surfing the Internet and answering general knowledge questions.Researchers said the people who did the brain training didn't do any better on the test after six weeks than people who had simply been on the Internet. On some sections of the test, the people who surfed the Net scored higher than those playing the games.

Some brain-game manufacturers argued with the studies results, claiming that the findings didn't apply to their games. Whether or not the results of that study are on the money, professor of psychology from the University of Illinois Art Kramer points out: "There is precious little evidence to suggest the skills used in these games transfer to the real world."

Brain training games do not make you smarter - FACT

Nicole Kidman may have been fooled by its cute brain teasing charms, but Tech Digest were never truly convinced. Now there's proof: new research shows that brain training games do not improve your IQ.

A scientific study of 11,430 volunteers conducted by the BBC proved that while using the brain trainers made the gamers better at the games themselves, the skills gathered were not transferable to the world at large.

One third of the volunteers were tasked with training their reasoning powers, planning and problem-solving skills, another third played games designed to train short-term memory, attention, mathematical abilities and visuospatial skills, while the final group were given web-browsing tasks that didn't target any specific cognitive skills.

Across all the tests, none of the brain game participants gained a boost in everyday thinking tasks any more than those using the web-browser.

Dr Adrian Owen, a neuroscientist at the Medical Research Council, said: "The results are clear. Statistically, there are no significant differences between the improvements seen in participants who played our brain training games, and those who just went on the internet for the same length of time."

LONDON: People playing computer games to train their brains might as well be playing Super Mario, new research suggests.

In a six-week study, experts found people who played online games designed to improve their cognitive skills didn’t get any smarter.

Researchers recruited participants from viewers of the BBC’s science show Bang Goes the Theory. More than 8,600 people aged 18 to 60 were asked to play online brain games designed by the researchers to improve their memory, reasoning and other skills for at least 10 minutes a day, three times a week.

They were compared to more than 2,700 people who didn’t play any brain games, but spent a similar amount of time surfing the Internet and answering general knowledge questions. All participants were given a sort of I.Q. test before and after the experiment.

Researchers said the people who did the brain training didn’t do any better on the test after six weeks than people who had simply been on the Internet. On some sections of the test, the people who surfed the Net scored higher than those playing the games.

The study was paid for by the BBC and published online yesterday by the journal Nature.“If you’re (playing these games) because they’re fun, that’s absolutely fine,” said Adrian Owen, assistant director of the Cognition and Brain Sciences unit at Britain’s Medical Research Council, the study’s lead author.

“But if you’re expecting (these games) to improve your I.Q., our data suggests this isn’t the case,” he said during a press briefing.

One maker of brain games said the BBC study did not apply to its products. Steve Aldrich, CEO of Posit Science, said the company’s games, some of which were funded in part by the US National Institutes of Health, have been proven to boost brain power.

“Their conclusion would be like saying, ‘I cannot run a mile in under four minutes and therefore it is impossible to do so,” Aldrich said.

Posit Science has published research in journals including the Proceedings of the National Academy of Sciences showing their games improved memory in older people.

Small effects, Small difference

Computer games available online and marketed by companies like Nintendo that supposedly enhance memory, reasoning and other cognitive skills are played by millions of people worldwide, though few studies have examined if the games work.

“There is precious little evidence to suggest the skills used in these games transfer to the real world,” said Art Kramer, a professor of psychology and neuroscience at the University of Illinois. He was not linked to the study and has no ties to any companies that make brain training games.

Kramer had several reservations about the BBC study’s methodology and said some brain games had small effects in improving people’s cognitive skills.

“Learning is very specific,” he said. “Unless the component you are trained in actually exists in the real world, any transfer will be pretty minimal.”

Instead of playing brain games, Kramer said people would be better off getting some exercise. He said physical activity can spark new connections between neurons and produce new brain cells. “Fitness changes the building blocks of the brain’s structure,” he said.

Still, Kramer said some brain training games worked better than others. He said some games made by Posit Science had shown modest benefits, including improved memory in older people.

Difficulty levels matter

Other experts said brain games might be useful, but only if they weren’t fun.

“If you set the level for these games to a very high level where you don’t get the answers very often and it really annoys you, then it may be useful,” said Philip Adey, an emeritus professor of psychology and neuroscience at King’s College in London.

If people are enjoying the brain games, Adey said they probably aren’t being challenged and might as well be playing a regular videogame.

He said people should consider learning a new language or sport if they really wanted to improve their brain power. “To stimulate the intellect, you need a real challenge,” Adey said, adding computer games were not an easy shortcut. “Getting smart is hard work.” — AP++++www.nature.com/nature

Wall Street titan Goldman Sachs made huge profits during the financial meltdown through subprime, or higher-risk, mortgage backed securities that have been linked to the origin of the crisis, Senator Carl Levin said on Saturday.

Wall Street titan Goldman Sachs made huge profits during the financial meltdown through subprime, or higher-risk, mortgage backed securities that have been linked to the origin of the crisis, Senator Carl Levin said.

The US Securities and Exchange Commission (SEC) charged Goldman Sachs with fraud earlier this month, sending the company's share price into a tailspin.

"These emails show that, in fact, Goldman made a lot of money by betting against the mortgage market," said Levin in a statement alongside the internal messages that were released ahead of a hearing next week focusing on the role of investment banks in contributing to the crisis.

The SEC accused the Wall Street investment giant of "defrauding investors by mis-stating and omitting key facts" about a product based on subprime securities.

Monday, 26 April 2010

THE world of work is changing. More people are working into their so-called retirement years.Many wish to embark on new career paths. I know of people who have said good-bye to high-stress jobs to follow their passion.

For others who are less financially secure, work is a necessity. Perhaps they didn’t save enough for retirement or maybe their investments have soured.

In many instances, employees in their late 40’s or 50’s find it hard to find a company that understands how valuable they are.

Unless the person has special experience or credibility that is sought after for management, directorship or advisory positions, their employability value has decreased.

Age discrimination in the workplace still persists in many companies. All young employees will ultimately age and they will experience similar treatment if we do nothing to change the negative perception aged employees currently suffer. You could soon become a victim of that discrimination.

There is a need to promote ideas for employing older employees and extending the retirement age. Savvy employers must recognise that their success depends on their employees’ contributions. It is the result of team effort, with old and young employees contributing their best. Yesterday’s employer-of-choice concept needs to be refined because the shifts in age demographics that have characterised the early 21st century have brought new challenges to the workplace. For instance:

·Brain drain: Baby Boomers and Generation-X migrating to other countries contributes to the country’s lack of talented and experienced human resource;

·Responding to the marketplace: A salaried ageing workforce will lead to more consumers. Only if businesses create job opportunities – with necessary take-home pay – for aged consumers will there be sufficient cash and demand for the products and services that are designed for that demographic;

·Manpower shortages: Employers with high percentages of older employees have begun to feel the impact of lost talent as Baby Boomers near the retirement age of 55 and above. Their concerns are exacerbated by fewer employees from the younger generation who are keen to work in routine or mundane jobs with unattractive salary packages. Sometimes, it is no longer the “work hard” but the “work easy” attitude for the young ones; and

·Lack of interest: Employers in industry sectors like agriculture, manufacturing or labour-intensive industries are facing difficulties in attracting young people. They resort to hiring foreign workers instead of retirees, who are often fully trained and capable of productive work.

It takes both hands to clap

Stereotypes of older employees have made us believe ageing brings with it physical and attitude limitations (not to mention a lack of being technology savvy). Sometimes this can lead to disengagement at work with other colleagues.

But this may not be necessarily true. There are Baby Boomers with positive mental health and attitudes, superb technical and people skills that are not being given second opportunities to excel.

Unless employers accept that age is just a number and continue the employment relationship as long as the employee can make valuable contributions to the company, nothing much can be done.

While older employees can adopt new paradigm shifts in mindset to be more engaged with young colleagues, employers can consider aligning older employees’ competencies with specific business strategies that take advantage of their wealth of experience. Whether you call them “know-how”, “gut feel” or “instinct”, these attributes are often lacking in younger employees.

Multi-generational workforce

Companies in some western countries with ageing populations are now adopting a new work culture – a multi-generational workforce – and policies that provide alternatives for both young and old employees to improve their work-life balance.

These measures have proven to help overcome manpower shortages, retain employees who want to spend time with family and attract retirees to work.

These new approaches have led to a healthy work culture for employees of all ages with different life priorities and are non gender-biased.

Employers benefit from less staff turnover and salary costs, while work gets done with multi-generational engagement ideas such as:

·Flexible work options: Flexi-time or reduced-hour options like part-time positions, job shares and phased retirement (part-time work designed for older employees to ease the transition into retirement);

·Work on project or contract basis where an employee is “self-employed”;

·Jobs with different sets of responsibilities to develop new competencies, or less demanding jobs due to health or personal reasons; and

·Work from alternative locations or home to reduce commuting time and ecological footprint.

For the 21st century multi-generational work culture to be successful and rewarding for Malaysia’s business and work community, human resource managers must implement these new concepts as soon as possible.

Employment agencies or online job portals will need to specialise in flexible work option job matching.

These are small hurdles but the result is a healthy society with higher number of employed people including retirees, leading to improved economic growth for the country and consumption growth for individuals. It is at this point that we can all stand and give ourselves a self-congratulatory clap – with both hands!

BY CAROL YIP ·Yip is a personal financial coach and also founder and CEO of Abacus for Money.

April 24 (Bloomberg) -- Australia will tighten rules on foreign investment in real estate, and introduce penalties to enforce the changes, to ensure pressure isn’t placed on housing availability for local residents.

Temporary residents will require approval from the Foreign Investment Review Board to buy property, and will have to sell when leaving the country, Assistant Treasurer Nick Sherry said. It ensures “working families are not being priced out of their own family homes,” Prime Minister Kevin Rudd said in Canberra today, a transcript from his office shows.

Treasurer Wayne Swan eased restrictions on non-residents in late 2008, making it easier for foreigners to buy property without government approval. Surging house prices, which advanced more than 10 percent last year, were among reasons the Reserve Bank of Australia boosted the benchmark interest rate this month for the fifth time in six meetings.

“Foreign purchasers can play an important role in supporting the development of new rental properties,” Aaron Gadiel, chief executive of Urban Taskforce Australia, said in an e-mailed statement. “Given that our national housing undersupply is reaching 200,000 homes, we should welcome any investment by foreign residents or businesses in boosting our supply of newly built homes.”

The lack of housing supply is the underlying issue for housing affordability, Gadiel said. Urban Taskforce Australia is an industry group representing property developers and equity financiers.

‘Foreign Speculators’

“We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home, and we think this is the right course of action,” said Rudd, who faces an election within a year.

Australia will back up the changes with compliance, monitoring and enforcement measures including civil penalties, Assistant Treasurer Sherry said in a statement today. These include compulsory sales of property purchased in breach of the new investment regime, Sherry said.

Temporary residents will be required to start construction on undeveloped land within two years of purchase or be forced to sell, he said. The tighter rules will also apply to people on student visas, Sherry said.

Overseas Buyers

Overseas buying may have contributed to rising house prices, Sherry told reporters in Melbourne today. The measures are precautionary and won’t have a “major impact” on the housing market in Australia, Sherry said.

David Airey, president of the Real Estate Institute of Australia, is among those blaming gains in home prices on an increase in investment from overseas buyers, particularly Chinese. The institute today supported stricter rules. Prices jumped 12.7 percent in the year through February, a March 31 report by real-estate monitoring company RP Data-Rismark showed.

Overseas purchasers accounted for about 0.62 percent of transactions by LJ Hooker in 2009, David Maher, business analyst at the real estate agency, said in a telephone interview on April 15.

‘Ridiculous Claims’

“Claims that overseas buyers are pricing people out of the market are ridiculous,” Maher said. “There’d have to be a mammoth increase in the level of overseas investment to have any real effect on affordability in the Australian market. The numbers don’t show that.”

An increase in housing through the release of more land, and measures to reduce the amount of money and time it takes to develop new projects, are required to ease prices, Charles Tarbey, local chairman of Century21 Real Estate, said April 6.

The average sales price of houses and apartments its agents sold between Jan. 1 and March 29 this year was A$407,228 ($378,000), an 18 percent increase from the same period in 2009, according to Century21 data.

For the first time since the BBC started tracking global views in 2005, the United States' influence in the world is now more positive than negative on average. Fine. So where does China stand in the grand scheme of things?

As you might expect, it depends on who's spinning the data as well as who you ask.

China Daily unequivocally says that "China's image has seen an upswing after hitting a low last year," with 41% of nations polled seeing China as having a positive influence on the world. The survey, conducted by GlobeScan/PIPA among more than 29,000 adults, asked respondents to say whether they considered the influence of different countries in the world to be mostly positive or mostly negative.

The fun starts when you look at the details, with significant year-on-year shifts in views of China within different countries.

For example, China's image improved considerably in such countries as the Philippines. While in 2009 a majority (52%) took a negative view, this has dropped 21 points. Now a majority (55%) has a positive view (up 16 points).

Japan's attitude witnessed a remarkable change, with those holding a negative view dropping from 59% to 38%, while those holding a positive view soared from 8 to 18%.

Europe continues to be the region that is the most negative toward China, but negative views have softened in Portugal (now 54%, down from 62%), and France (64%, down from 70%). In addition, positive views have increased among Germans (now 20%, up from 11%), although a large majority (71%) remains negative.

The U.S.'s attitude toward China remains roughly unchanged, with 51% holding a negative view. The report, curiously, did not give a figure for those holding a positive view.

All told, China ranks 11th in the 28 countries or regions mentioned in the poll, behind Germany, Canada, the European Union, Japan, the United Kingdom, France, Brazil, the United States, South Africa and India.You can read about poll methodology here.

By Ray KwongRay Kwong is a cross border business development geek and a Forbes contributing writer.

April 25 (Bloomberg) -- The fortunes of the richest people in the U.K. rose at a record pace last year, with the 1,000 wealthiest experiencing a 30 percent increase in their net worth, according to the annual Sunday Times Rich List.

Lakshmi Mittal, the 59-year-old chief executive officer of ArcelorMittal, the world’s largest steelmaker, topped the list for the sixth straight year. His fortune doubled to 22.5 billion pounds ($34.6 billion) as the recovering economy bolstered orders from automakers and builders, according to the Rich List, published today.

Roman Abramovich, 43, the Russian-born billionaire, remained in second place after adding 400 million pounds to his net worth.

The cumulative wealth of the U.K.’s richest people rose to 333.5 billion pounds ($512.8 billion) during the year. The total fell short of the record 413 billion pounds reached in 2008, according to the rankings compiled each year by Philip Beresford. None of the top 10 lost money during the year, while the number of billionaires on the list rose 10 to 53.

The list has been compiled for the past 22 years and is based on identifiable wealth, including property, art, racehorses and shares in publicly-held companies. It excludes bank account balances.

The 30 percent increase in combined wealth in the last year is “easily the biggest annual rise” in the history of the list, Beresford said in an e-mailed statement.

The year before, the net worth of those on the list had plunged 37 percent, in the depths of the global financial crisis.

Joseph Lau, Duke of Westminster

The highest new entry was Joseph Lau, the 58-year-old chairman and CEO of Hong Kong-based Chinese Estates Holdings Ltd., who took the 12th spot. Lau, with a fortune calculated at 3.8 billion pounds, recently paid 33 million for a house in London’s Eaton Square.

The Duke of Westminster, the highest-placed British-born billionaire, remained in third place. His ancestral land holdings in central London are among the most expensive properties in the nation and helped boost his net worth by 4 percent.

It was the smallest gain seen among the wealthiest 10 people in the U.K. The Queen, 84, ranked 245 with a fortune of 290 million pounds.

ArcelorMittal Falling from the top 10 were Hans Rausing and family, whose fortune is in packaging; Sammy and Eyal Ofer, and John Fredriksen in the shipping industry; Joe Lewis in investments; and Kirsten and Jorn Rausing in inheritance.

Mittal holds a 41 percent stake in Luxembourg-based ArcelorMittal, which he formed through the takeover of Arcelor SA by Mittal Steel Co. in 2006. The stock surged 89 percent in 2009 as it boosted output of the metal as the world economy recovered and automakers and builders increased orders.

The steel industry is recovering faster and stronger than expected, the World Steel Association said April 20. The group, whose members include nineteen of the world’s 20 top steelmakers, forecast that steel consumption will increase 10.7 percent this year.

European hot-rolled coil, a benchmark product used in cars and appliances, increased 41 percent in the first quarter as raw material prices surged, according to Metal Bulletin data.

Abramovich Abramovich, owner of the Chelsea football club, accrued his wealth after the fall of the Soviet Union by building up Russia’s fifth-largest oil producer. His oil business, OAO Sibneft, was bought by OAO Gazprom in 2005 as then-President Vladimir Putin moved to return the country’s oil wealth into state hands.

The billionaire, once Russia’s richest man according to Forbes, has since bought into metal producers. Millhouse LLC, which manages his assets, has stakes in Evraz Group SA, Russia’s second-largest steelmaker, and Highland Gold Mining Ltd.

Sunday, 25 April 2010

His resume is probably one of the most viewed in China - but instead of finding "Ma Wen" his dream job, it propelled the desperate graduate to Internet stardom.

When the 21-year-old multimedia designer uploaded a video showcasing his talents on a Chinese social networking site last year, the idea was to increase his chances in a tough job market.

But although the clip attracted millions of hits, very few of them were prospective employers.

"Most e-mails were from other students asking me how I made the video," Ma Wen told China Daily via MSN chat and e-mail (he refused to talk on the phone or use his real name).

Although video resumes are not a new concept, more graduates are now using them to improve their prospects in the chilly economic climate. However, analysts say most employers and online businesses in China are "stuck in the past" and are failing to exploit the recruitment opportunities offered by social media.

Ma Wen graduated with a degree in computer science from Xi'an University of Technology in the summer of 2008, shortly before the world entered the worst financial meltdown for decades. With most companies putting a freeze on hiring new staff, Ma Wen soon became exasperated by the lack of job opportunities..

Popular social media sites in China:RENREN

Launched: 2005 (formally Xiaonei, it changed its name in 2008)

Typical users: Mostly students and recent graduates. Theemphasis is on connecting with real-life friends online.

Interface: Almost identical to early versions of Facebook.

It has a few unique features, such as a “footprint”, and a “funware” platform for games.

Popular functions: Mostly games. It has more than 250 game applications, which are often copied by its competitors.

Estimated market share: 17 percent

Popularity ranking in China: 17

KAIXIN001

Launched: 2007

Typical users: Office workers. Its users spend twice as much time on the site, compared to users on other social networks

Interface: A simplifi ed version of Facebook with very little advertising.

Popular functions: It has about 50 applications, the majorityof which are games (the site launched the social games craze in China but Renren has since stolen its thunder).

Post-forwarding of celebrity gossip, photos and funny stories is also extremely popular.

Estimated market share: 12 percent

Popularity ranking in China: 13

51.COM

Launched: 2005

Typical users: People from small cities

Interface: Simple. It is far more functional than elegant. Popular functions: Again, games. In all, it has 50 applications.

Estimated market share: 12 percent

Popularity ranking in China: 40

"I sent out my resumes to many companies but got no replies at all," he said. "And when I did get interviews, as soon as they found out I didn't go to a 211 project school (a national initiative that includes what are considered the top universities), they passed to the next person."

About 13 percent of the 6.1 million new graduates last year failed to find work, while another 6.3 million are expected to enter the job market across China this summer, according to figures from the Ministry of Human Resources and Social Security.

With such fierce competition, the Internet can be a vital tool for jobseekers, say analysts.

Use the word "resume" - jianli in Chinese - to search any Western or Chinese video-sharing website and you will see short films made by students to show their skills in design, production, animation, music and even teaching.

After months of fruitless searching, Ma Wen decided last April to join them by uploading his video resume to 56.com, a website similar to YouTube.

During his 1-minute 37-second clip, which is based on television advertisements for Hewlett Packard that feature only celebrities' hands, he uses various computer-aided design techniques to display the films and directors he likes. At the end, he introduces himself as a graduate and his e-mail address appears on the screen.

But the response he received was far from impressive and instead of attracting offers from movie companies and large Web firms, "all I got were e-mails from individuals or small groups", he said. "They were offering me work but they didn't provide suitable career directions."

Disappointed, he turned down all the offers and is now studying English at a college in Harbin, capital of Heilongjiang province. He is now working on setting up his own social networking site for netizens to share software.

"It will be more user-friendly and less commercial than the others," he added.

Although Ma Wen failed to land a job, other graduates told China Daily that they believe social networking sites had been instrumental in finding their jobs. One of them was Huang Dongyu, 28, who used a video resume to land a career in advertising.

Creative thinking

After graduating from Xi'an Fanyi University in 2005 with a degree in communication technology, Huang found the only option was to become a technician for a cell phone firm.

"I didn't want to do maintenance work for telecom companies," he said. "My passion was design, so I taught myself how to use graphic design software in my spare time. I made my video resume in 2009 as practice when I was learning to use Flash software."

After uploading the video online, as well as sending it to employers and recruitment agencies, he got a job as a web designer with Sheer Digital Technology based in Chengdu, capital of Sichuan province.

"The human resources department (at Sheer) mentioned they saw my video resume," said Huang. "I did other things and I don't think the resume was the only reason they hired me - after all, a resume is only one part of the whole job hunting process - but it definitely helped."

Although some experts argue video resumes are unpopular with employers and job agencies, Jack Lee, a recruitment manager with the Beijing-based Apex Recruiter, encouraged graduates to exploit all avenues to improve their prospects.

"Companies that are hiring usually have too many resumes to deal with, so it is important not to wait for HR staff to come to you. Explore your contacts and find a way to contact them," he said.

Job search forums

However, uploading video resumes is just one of the ways jobseekers can target recruiting companies through social networking sites, as online businesses in the West have proved. Many websites now already set up job search forums and message boards.

The fact that Facebook, Twitter and YouTube - arguably the world's three biggest names in social media - are not available in China should open the door for domestic services to dominate. Yet few are even attempting to enter the recruitment market, say experts.

Renren.com, which is similar in style to Facebook and is among the country's four most popular social networking sites, is the only one that offers a job-searching platform for college students. Most of its rivals are still focusing on pushing entertainment services.

Since the platform was launched on March 9, about 200 companies have posted advertisements for more than 1,000 positions.

Most of its functions are similar to zhaopin.com and 51job.com, both online recruitment agencies, and to ensure security, recruiters must get permission before they can access members' profile pages.

"If companies are interested in any candidates, they can add them as friends and get that person's permission to view their information and network," said Song Tiantian, spokesman for Oak Pacific Interactive, the Beijing-based firm that owns renren.com and mop.com, an online forum also popular with students.

Although no other social networking sites have yet launched job services, Yu Yi, an analyst for Analysys International, a Beijing consultancy firm that specializes in telecommunication and media, is confident they will.

"These sites have attracted lots of users through various game applications. Now, to make a profit they are exploring new revenue streams," he said. "Developing a job-searching platform and other practical applications will attract specific demographic groups and will help websites expand their value."

Meanwhile, several online firms already offer video interview services, including production and distribution to domestic and international recruiters.

The first in China was cnvhr.com, which was launched in 2004, and now has 20,000 registered users and 2,000 affiliated companies. However, it is yet to make a profit and owner Guo Xu said he has stopped paying to promote the service.

"There are still companies and individuals using our video interviewing service every day since it's free of charge, but I don't manage it now," said Guo, whose site is hosted on a free server provided by Tianjin's education authorities and is used to organize job fairs in the city. "It doesn't cost much to maintain the site."

Killing time online?

In the United States and Britain, as well as in multinational corporations like IBM, executives now actively encourage workers to open accounts with Facebook, Twitter and Linkedin to not only advertise events and vacancies organized by the company, but to aid communication between staff.

Chinese companies, however, still rely on "old-fashioned" job fairs to find staff, and even continue to block access to many sites because they believe workers waste too much time playing online games.

"Most firms in China are being too slow in utilizing these new (social media) tools," said Hu Yong, an associate professor at Peking University's school of journalism and communication. "Bosses still think these websites are where office employees spend all day stealing vegetables."

The vegetables he referred to are on Happy Farm, one of several games that have attracted millions of users to kaixin001.com.

Are bosses wrong to think their staff would waste all day playing online games at work?

Not according to a recent survey by the China Internet Network Information Center. Of the 3,007 netizens polled, 42 percent admitted the main reason they log on to social networking sites is to "kill time".

However, if human resources and recruitment firms do not change their mindset and tap into the power of social media, they risk being left behind, Hu said.

"They need to learn how to use Web 2.0 (applications that aid global interaction and collaboration) and social networking. They need to be part of this new environment," he said.